Tax Type
Individual Income Tax
Partnerships
Description
Unified nonresident income tax return; Conditions to file
Topic
Partnerships
Returns/Payments/Records
Date Issued
12-10-1987
December 10, 1987
Re: Ruling Request/Individual Income Tax
Dear ****************
This is in reply to your letter of September 14, 1987 in which you request permission on behalf of the nonresident partners of ********* (Partnership) to file a unified nonresident individual income tax return.
FACTS
Partnership is a Maryland partnership which transacts business in Maryland, the District of Columbia and Virginia. Similarly, its partners are domiciled in the above three localities. Of Partnership's 71 partners, 59 are nonresidents of Virginia. In order to relieve Partnership's individual partners of the responsibility of filing Virginia nonresident individual income tax returns, you request that the department grant permission to Partnership to file one unified nonresident individual income tax return, on behalf of the nonresident partners.
RULING
Section 630-4-391(C)(2) of the Virginia Taxation of Partnerships Regulations provides that the Tax Commissioner may grant permission to nonresident partnerships to file a statement of combined partnership income attributable to nonresident partners. This provision of the regulations relieves the nonresident partners of the responsibility of having to file nonresident individual income tax returns.
In order for the department to accept a unified nonresident individual income tax return and thus relieve the nonresident partners of the responsibility of having to file separate Virginia nonresident returns, the following conditions must be met:
1. A schedule must be provided containing the total income of the partnership and the amount attributable to Virginia under either the applicable state apportionment formula, as provided in Virginia Code §§58.1-408 through 58.1-421, or by using an approved alternative method.
2. The unified return must reflect only the income or loss attributable to Virginia nonresident partners who have no income from Virginia sources other than income attributable to the partnership.
3. All nonresident partners without other income from Virginia sources must elect to join in the filing of such a return and a statement to such effect will be included in the return.
4. The return will include each nonresident partners name, address, social security number and Virginia taxable income attributable to each nonresident partner.
5. The Virginia income tax will be computed at the rates specified under Virginia Code §58.1-320 on Partnership's income attributable to the nonresident partners without benefit of itemized deductions, standard deductions, personal exemptions or credit for income taxes paid to states of residence.
6. The return will contain a statement indicating the responsibility of each nonresident partner for his share of the total tax and any statements made on his behalf. The statement will be signed by each nonresident partner.
7. A similar unified return will be filed and payment made for the declaration of estimated tax, if required.
If the above is acceptable, Partnership may commence the unified filing under the above conditions effective for taxable year 1987. However, we reserve the right to withdraw or modify the foregoing authorization upon reasonable notice to you.
If the above is not acceptable, please note that each nonresident partner having taxable income for a taxable year must file a Virginia return, unless the individual meets the filing exceptions described in Virginia Code §58.1-321. Failure to file an individual nonresident return would subject the nonresident partner to penalty and interest, which could not be mitigated by the fact that a unified filing had been made unless the unified filing was in accordance with the conditions set forth above.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner